JAKARTA: US President Donald Trump and Indonesian President Prabowo Subianto agreed to take ties to a “new golden age,” as the two countries signed an agreement on reciprocal trade that will remove tariffs on virtually all American exports to Indonesia and lower US tariffs on Indonesian goods to 19 percent.
The deal comes after seven rounds of negotiations, which followed Trump’s threat to impose a 32 percent duty on Indonesian exports last April.
The two leaders “confirmed their strong commitment to implementing” the deal and have instructed their teams to “take further steps for a NEW GOLDEN AGE of the ever-growing” Indonesia-US relations as they met on the sidelines of the US-led Board of Peace’s inaugural meeting in Washington, according to a White House statement.
Under the deal, Jakarta is expected to purchase an estimated $33 billion in American goods, including $15 billion in US energy products and $13.5 billion in commercial aircraft, while some of Indonesia’s exports, such as coffee, spices and pharmaceuticals, would be tariff-free.
It also creates a mechanism for certain textiles and apparel products to earn tariff exemptions, with Indonesia planning to increase the sector’s exports from the current $4 billion to $40 billion in 10 years, Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs and chief trade negotiator, said on Friday.
“(The deal is a) win for everyone. The philosophy of this agreement (is that) it has to be win-win, a benefit for the Indonesian people as well as to the US people because we would like to achieve the golden era for both countries,” he said during a virtual press conference.
The agreement, which Hartarto signed with US trade representative Jamieson Greer, will enter into force 90 days after both sides complete related legal procedures, but changes could still occur if both sides agree.
In the past decade, Indonesia has consistently posted trade surpluses with the US, its second-largest export market after China.
The US’ trade deficit with Indonesia was $23.7 billion in 2025, US government data showed.
Beyond tariffs, the pact touches critical minerals, with Indonesia agreeing to allow and facilitate US investment in critical minerals and energy resources, departing from a traditional caution of opening its natural resources sectors to foreign companies.
Indonesian officials also agreed to roll back several long-prevailing trade barriers, including inspections of farm products, export restrictions on critical minerals and local content requirements.
Rizky Banyualam Permana, a lecturer and doctoral researcher at the international law department at the University of Indonesia, told Arab News that “the majority of the agreement’s provisions impose obligations on Indonesia” rather than establishing genuinely mutual and reciprocal market access.
“Contrary to its title as an ‘Agreement on Reciprocal Trade,’ the agreement appears to function primarily as an instrument through which the United States dismantles Indonesia’s non-tariff measures, while offering only marginal additional market access in return,” Permana said.
Some of Jakarta’s commitments under the deal will require Indonesia to amend existing laws, which may significantly alter Indonesia’s legal and regulatory framework, he added, citing current export restrictions on raw minerals and the mandatory halal certification scheme that does not appear to apply to US products, including cosmetics.
“These changes cannot be implemented solely through executive regulation; they would require parliamentary approval, raising constitutional and political implications,” Permana said.
“This agreement should not be viewed merely as a tariff reduction scheme that benefits Indonesia. Rather, the 19 percent tariff reduction appears to come at the cost of a significant contraction of Indonesia’s regulatory autonomy.”
